Crisis of trust: Over a quarter of Brits avoid saving with banks amid growing distrust

A recent report by Raisin UK, the Great British Savings Report, reveals a growing crisis of trust in traditional banks, with more than a quarter of Brits (26%) reluctant to save with them. While 37% of savers still prefer traditional banks, confidence is waning—especially among younger generations—driving many to explore alternative financial institutions.

Although traditional banks remain the most popular choice, only 28% of 16-24-year-olds primarily save with them. In contrast, 16% of younger savers opt for savings platforms, and 14% turn to online-only banks. This shift underscores a growing preference for institutions that offer greater transparency and competitive returns.

The lack of trust isn’t just keeping money out of banks - it’s keeping savings stagnant. According to Bank of England data, £253 billion is currently sitting in bank and building society accounts earning no interest at all. Raisin UK’s report further reveals that 17% of savers regret sticking to low-interest accounts, costing them thousands in potential returns over time.

Kevin Mountford, co-founder of Raisin UK, comments: “Distrust in banks is stopping people from taking control of their financial future. With inflation continuing to erode the value of savings, it’s critical that savers move their money to accounts that work harder for them.

"One key driver of this distrust is the perception that banks lack transparency. Many savers feel misled by fine print, such as introductory bonus rates that expire or ‘easy access’ accounts with unexpected withdrawal limits. This adds to frustration and highlights the urgent need for clearer communication from financial institutions."

“Trust in the savings process is incredibly important, but there are robust protections in place for UK savers. The Financial Services Compensation Scheme (FSCS) safeguards up to £85,000 of savings per institution, while the Financial Conduct Authority (FCA) enforces strict regulations to protect customers’ money.

“The sheer amount of money stuck in zero-interest accounts is alarming. Savers must act now to make their money work harder. Savings platforms like Raisin UK can help by giving savers access to a wide range of accounts with competitive rates across trusted institutions. This enables savers to diversify without compromising security for better returns.”

For more information and to read the full report, visit Raisin UK.